4 Things You Can Learn from Your Bankruptcy to Avoid Ever Filing for Bankruptcy Again
Filing for bankruptcy is always the last option chosen by those suffering from financial hardship, yet it can often be a blessing in disguise. Not only does it make it possible to make a financial recovery going forward, there are invaluable lessons to be learned when going through bankruptcy.
1. The Important of Budgeting
Perhaps the biggest lesson to be learned from filing for bankruptcy is the importance of budgeting. Most people understand how important it is to budget their finances, yet not everyone puts it into practice.
So, for anyone that has gone through bankruptcy, learning to budget is one of the best lessons to take from the experience. The simple act of outlining their income against all expenses and sticking to the budget can work wonders for avoiding debt and eventual bankruptcy.
2. Credit Cards Need to be Used Responsibly
Credit card debt is almost always one of the biggest factors leading to bankruptcy. It’s easy to pay bills on credit when there is no other way to pay them, but this is only ever a temporary fix.
Relying on credit cards to pay most of your bills is only ever going to lead to a mountain of bills that can’t be paid, with bankruptcy becoming more a possibility.
So, anyone that’s gone through bankruptcy will know that credit card debt can become seriously dangerous when left unchecked. However, recovering from bankruptcy involves rebuilding credit, with a credit card being a necessary component of this, but using them responsibly is a must to avoid any future problems.
A good option is to go for a secure credit card that requires a cash deposit before it can be used, meaning you can only spend what you put in, while paying all monthly loans on time is also a must to avoid falling into a similar pattern.
3. Don’t Take Your Credit Rating for Granted
One big lesson many learn from their bankruptcy is the importance of a good credit rating. While it will be difficult to rebuild a credit rating after filing for bankruptcy, doing so goes a long way to avoiding bankruptcy in the future.
For example, having a poor credit rating means you don’t get the best interest rates for your loan. Higher interest rates mean more debt to repay, which often snowballs into serious debt, and eventually bankruptcy.
A good credit rating is often-overlooked by many, but those that have undergone bankruptcy will never take their credit rating for granted again.
4. Prevention Goes a Long Way
Filing for bankruptcy is always the last option for most people, which means it’s taken a while to get here. Small debts accumulating over the years can end up causing more damage than first thought, with various credit card bills always adding up in the end.
One reason this happens is a lack of foresight for the future. For example, rather than taking the time to care for a vehicle to ensure it last for many years, many people simply wait until a problem arises and then deals with it then.
If you go through bankruptcy, you realize how much can be saved by taking preventative measures – don’t hold off on getting those repairs or replacements, as it could end up costing more in the long term!
The Travis Law Firm provides professional legal representation for Chapter 7 & Chapter 13 bankruptcy services for residents of all cities in Riverside and San Bernardino Counties. We have offices in Riverside, San Bernardino, Victorville, Temecula, Cathedral City and Ontario for the convenience of our Inland Empire, High Desert, and Coachella Valley clients. For more information about our bankruptcy law services and other legal representation, call us today at 1-800-BANKRUPT or (951) 274-9501.